Saturday, 16 November 2013
The Roman monetary base 1,800 years ago.
Sanjeev Sanyal says:
“One part of the world runs large deficits for a prolonged period, creating demand; another part of the world runs surpluses, financing its counterparts’ deficits. This was true of Roman-Indian trade in the first and second centuries…. The Romans had to debase their coins, owing to the continuous loss of gold to India.”
I assume that what happened there was that the Romans found they had an inadequate monetary base (i.e. gold) and so resorted to making the base semi-fiat. I.e. gold coins adulterated with other metals were deemed to have the same value as the earlier pure gold coins.